DIFFICULT TIMES AHEAD
The New Government, One Year Later
By Syed M. Aslam
Oct 09 - Oct 15, 2000
What goes up must come down. At least that was the moral of the story when the plane carrying General Musharraf denied permission to touch-down finally landed at the Karachi International Airport to usher in a bloodless coup. The rest, as they say, is history. October 12 marks the completion of the first year of the Musharraf government.
This story neither intends to deal with the absence of what is passed off as democracy in Pakistan nor the failure of the politicians. It also does not intend to talk about the growing dissatisfaction about the Nawaz Sharif government immediately prior to its removal by the army. It aims to highlight the accomplishments, or lack of it, particularly with reference to the state of economy in the country. Primarily it attempts to answer just one question — are the people better off today than they were a year ago.
During his televised speech General Pervez Musharraf announced an agenda whose salient features, though not worded as such, can be described as the restoration of the confidence in the government. It promised the rule of the law, devolution of the power to the grass roots level, better harmony between the provinces, stern action against bank defaulters and action against corruption.
The military take-over was accorded the stamp of Judicial approval exactly seven months later on May 12 this year. The approval came in the shape of verdict given by the highest court, the Supreme Court of Pakistan, in several petitions challenging the takeover. The Court asked the military government to restore democracy by October 12, 2002. It also allowed the Musharraf government to amend the constitution with certain limitations and held that the constitution was still valid despite the fact that a number of its sections had been held in abeyance.
The salient features of the agenda presented by General Pervez Musharraf comprised an across the board accountability without fear or favour, stern action against defaulters for the recovery of billions of politically-motivated loans by the nationalised banks and public sector non-banking financial institutions, a sweeping anti-corruption drive, devolution of power to the grass roots levels, and the establishment of real instead of sham democracy in the country.
The initial response of the people was that of relief. Relief from the personalised political vision, the increasing gulf between those who have it all and those who have been increasingly marginalised. Relief from the price hikes running amok and from a deteriorating law and order situation.
During his televised speech on October 17, General Pervez Musharraf gave the loan defaulters four weeks to pay back their loans or else. The 'or else' resulted in the arrests of 21 powerful persons including a former Air Marshal and arrest warrants for many others a day after the expiry of the deadline on November 16. The action sent the much needed shock-wave through the circles of otherwise high and mighty untouchables. It also sent a strong signal that nobody would be spared and in its wake humbled many a power-drunk politicians and their minions in the bureaucracy and elsewhere to realise that this time around the tables are really being turned.
This indeed was seen as a welcome change from the past practices of targeting only the weak and the under-privileged segments of the society. However, euphoria proved to be short-lived due to a slow accountability process and escape of numerous corrupts to the safe havens outside the country. The Chief Executive Pervez Musharraf himself expressed his dissatisfaction at the slow speed on accountability on a number of occasions.
Many felt that the Supreme Court verdict would result in the gearing up of the accountability particularly with the arrests of Lakhani brothers, the heads of influential business group and the former federal trade minister and influential industrialist and politician Chaudhary Ahmed Mukhtar shortly after the verdict. However, reports of imminent arrests of hundreds of politicians and bureaucrats by the National Accountability Bureau (NAB) did not materialised.
Besides the crackdown on loan defaulters, the Pervez Musharraf government also initiated a Tax Amnesty Scheme to bring the massive black money in to circulation, crackdown against massive smuggling bleeding the national economy, the resolve to impose the general sales tax at the retail level and the planned house-to-house and shop-to-shop survey to detect the wealth and property tax evasions. The last was met with a strong protest from the business and trade community and still goes on unabated today.
In last one year the government pressurised by international loaning agencies has increased the prices of such basic utilities as petroleum and products, electricity and gas numerous times. The prices of all kitchen and everyday items have also increased substantially during last one year. The prime example can be that of sugar which registered as high as 60 per cent price increase in last two months.
The absence of any public reaction till today proved that the people gave a tacit support for the take-over. However, people feel that the performance of the government during its first year has fell short of bringing any relief to the people and the promise of stern accountability is not materialised to its fullest. Many known corrupt politicians, serving and retired civil servants are left untouched despite having a corrupt-to-the-core public image. The government on many occasions have said that white-collar crimes are hard to prove but it has done little to change the public perception.
The takeover was welcomed by many as a sign of much needed change to revamp a culture infested by corruption at the highest levels of the government. It was seen as an elixir to cure the malaise of a corrupt and ineffectual bureaucracy, police excesses and a system where no work could be done without greasing the palms at every step irrespective even if all the legalities are met. Those who made the materialising of the stern action against corruption a benchmark of the government's performance feel that the much expected shifting of focus from the corrupts to the masses seriously tarnishes the government's image. It is generally felt that instead of catching the 'big fish' the government is now more interested to target the masses.
The government has been able to recover only a portion of defaulted loans, the majority of which was politically motivated, despite the fact that the volume of recovery is in billions. While it is true such a huge amount has never been recovered by any of the political governments before it is also true that it represents only a portion of the total amount recoverable whatsoever the reasons be.
There is one thing the people of Pakistan are most dreaded of, it is the type of democracy that they been forced to bear during last decade. A democracy which accorded draconian powers to the politicians, ruling or otherwise, without any check and balances being answerable to the people. The slow pace of accountability has not only failed to punish the politically-motivated misdeeds of the past in every department and at every levels but also resulted in the increased cacophony by the politicians. The masses are unable to understand the delay to award deserving punishment to the corrupts without being bothered to understand the intricacies. They feel that when the ordinary people of the country can be punished strongly for the smallest of infractions why the corrupts are being spared on the pretext of lack of evidence. What more evidence does one need to prove corruption than living beyond one's means and paying almost no or just a little income tax, they argue. Many of them cite the case of Chicago gangster Al Capone who was convicted to rot in jail for evading income tax when the government was unable to convict him on any other charges due to lack of evidence. If it worked for the US why it could not work for Pakistan, many ask.
The silent, but not blind, majority has also taken the lack of resolve by the government — a military government — to take its tough stand against smuggling in early May to its logical conclusion. The interior minister, Moinuddin Haider, had announced a war on smuggling in late April to not only abolish smuggling at the Bara market, the biggest bazaar of smuggled goods in the North West Frontier Province, and its smaller counterparts in every nook and corner of the country but also to conduct raids to force the traders to registrar their business, pay the taxes and to refrain from illegal business in the future. He gave the traders of the Bara market a deadline till April 30 to register or face the crackdown from May 1. The date has come and gone months ago but smuggled goods are still available throughout the country in the absence of any move by the government. The matter is no more discussed and seems closed for all practical purposes.
The continuation of the economic embargo since Pakistan used its nuclear option in May 1998 and the stoppage of monetary assistance from the international loaning agencies to Pakistan after the takeover posed many difficulties for the country. The problem was further complicated due to a sharp decline in the remittances by the expatriates due to the arbitrary freeze of the foreign currency account the same month. The dwindling foreign currency reserves keeps posing serious problem to the government at present to pay its foreign loans.
With the passage of the first year the government has now two more years to fulfil its agenda and restore democracy. One of the objective laid down by the Chief Executive in his speech last October was relief to the people which does remain unfulfilled. People who welcomed the military takeover has been deprived of any relief thus far and instead they are made to cushion increase in petroleum prices, hike in fares of public transportation, incessant increase in prices of essential and non-essential items. While the government still enjoys the goodwill of the people by-and-large there is general feeling that they are forced to bear the corruption of the previous governments the rank-and-file of which still roam freely within as well as outside the country.
At present the government is facing not only immense external pressure but also acute internal political, social, economic and business unrest. The situation is worsened by increasing lawlessness, bomb explosions and an overall bad law and order situation. There are many who feel that the military government should act much more strongly to establish sense of authority. It should speed up the accountability process to award exemplary punishment to the corrupt irrespective of their political, social or economic clout and petty criminals which have made the lives of people extremely insecure. The restoration of law and order and sense of security should be restored at the earliest. Without addressing these issues on top priority basis the government would not be able to establish its credibility. It is time for the Chief Executive to fulfil his promise he made to the people on October 17 last year: "Our action will speak louder than our words," while warning the loan defaulters.
While the government has ruled out any possibility of war with India the military escalation along the border around Kashmir and daily skirmishes have become an all too routine. The principal standing of Pakistan asking India and international community to help solve the Kashmir dispute on the basis of United Nations Resolutions is being courageously advocated by General Musharraf and his government at all levels of international forum.
The visible tilt of the US and other international powers towards India, the growing demand for the restoration of democracy by the international community remaining indifferent to and protecting the known high level corrupts by providing them safe havens, the increasing inflation, unemployment, the political cacophony created to protect the corrupts pose many challenges for the government. It is time for the Chief Executive to take strong decisions to steer the country of the prevalent crisis coming from both externally and internally.
Massive politically motivated loans issued by the nationalised banks and DFIs without fulfilling the norms have taken a heavy toll on the national economy. The loans were never meant to be returned and were not returned. This hurt the industrial growth of the country as the nationalised banks were unable to issue loans to the genuine entrepreneurs to undermine the very base of production and industry.
Rs 72 billion was owned by just 325 defaulters each of which owed Rs 100 million and above. The government introduced a new accountability law is vastly improved to include the Armed Forces, was aimed at effective and expeditious process and made wilful default of not only bank loans but also taxes and utility bills an offence punishable by the law. Unlike its predecessors — the Ehtesab [Accountability] Ordinance by Farooq Leghari's caretaker regime in 1996 and the Ehtesab Act by the deposed Nawaz Sharif government — the new law was much better defined.
Titled the National Accountability Bureau Ordinance (No.XVIII OF 1999) came in force at once and deemed to have come into force from the 1st day of January 1985. For the first time, the new ordinance included any person who has served in and retired or resigned or dismissed from the Armed Forces of Pakistan.
Of the total Rs 146 billion defaulted loans over Rs 8 billion was recovered in cash when the deadline ended on November 16, 1999.